Impact of Government Policy Measures on Small and Medium Enterprises of Automotive Component Industry Working in Pune Auto Cluster

Abstract

The government policy has a huge nexus with the development of the industrial sector and with the development of any specific industry. The automotive component industry is not an exception to this. This paper reviews the impact of policy measures adopted by the government pertaining to the automotive component industry in India on the small and medium enterprises of Pune Auto Cluster. The sample of 170 small and medium enterprises was considered to know their opinion about the government policy through a structured questionnaire based on the Likert scale. The technique of factor analysis is used as a construct validity tool and to reduce the number of variables into a few factors to understand the impact of government policy on small and medium enterprises in a better manner. The impact of government policy is remarkable on small and medium enterprises. Medium enterprises are affected more than the small enterprises in the case of regulatory policy measures. However, both small and medium enterprises perceived the operational policy measures equally. Small-scale industries have more impact of the difficulty in receiving benefits of any government schemes like duty drawbacks. On the other hand, medium enterprises perceived Goods and Services Tax and the tax policy as the most troublesome policy measures.